Public liability insurance and why you need it

Picture the scene. A client visits you at your home office. The meeting goes well and you are planning the new project. As they’re leaving the client trips over a box you have left lying around. Catastrophe! They break their leg and have to be taken to hospital. A few days later the medical bill arrives and it comes to more than a thousand pounds. Or you go on a client visit and spill a cup of coffee over their laptop. A few days later the bill arrives. If you don’t have public liability insurance where do you find the money to pay for it?

Do I have to have it?

Public liability insurance is not a legal requirement for freelancers or small businesses. However you should give careful consideration to taking out a policy if you have any interaction with third parties. The examples above relate to clients but it also applies to any member of the public who might be injured or suffer damage either directly or indirectly because of you.

As with any type of insurance of course we hope that the worst does not happen. However, where public liability cases are concerned, if someone makes a claim the bills can soon add up. These could be for a person’s medical expenses, the cost of damage to equipment or belongings, or paying for legal bills. The costs can mount up and in some cases can be enough to shut a business down.

What does it cover?

Basically, any injuries or damage caused by your business. Standard public liability insurance policies cover injury to the public, legal costs and property damage. This will cover off the cost of hospital bills, legal fees and damage to that laptop. Legal cover can be useful if you are sued by a third party, especially if you have to defend against a claim.

Remember however, that public liability insurance doesn’t cover people who work for you. For that you must take out employers’ liability cover (a legal requirement).

Which locations?

You will be protected for any incidents taking place on your business premises (including home office) or at off-site locations at events or activities that you have organised.

Level of cover

Many public liability policies for small business provide cover up to £1 million, although public sector contracts often require higher levels of cover – up to £5 million. It is commonplace for business contracts to specify the level of public liability insurance that a client must have. An insurance provider will look at factors like your business volume, the type of business you are involved in and whether you work on a third party site. All of these can either raise or reduce the level of cover deemed appropriate for your circumstances.

Editor’s Note:

We recommend Money Mate for public liability insurance as they give you back a lot of money making it free within 12 months (subject to status). They’re new but they have experience and can also offer you incentives to give to your own customers.